Illinois businessman admitted to shipping unwanted and unneeded medical supplies and “erectile pumps” to Medicare recipients at government expense

PROVIDENCE, R.I. – Gary Winner, 50, of Northbrook, Ill., owner of Planned Eldercare, a nationwide supplier of durable medical equipment located in Buffalo Grove, Ill., was sentenced today in U.S. District Court in Providence to 37 months in federal prison for defrauding the Medicare program of more than $2.2 million, announced U.S. Attorney Peter F. Neronha.

Winner pled guilty on November 17, 2011, to two counts of health care fraud, and one count each of money laundering and the introduction of an adulterated and misbranded medical device into interstate commerce. Winner admitted to targeting arthritic and/or diabetic Medicare beneficiaries through telemarketing, then ensuring that his company ordered and shipped medical equipment and supplies to the beneficiaries contacted that they did not order and/or were not medically necessary.

U.S. District Court Judge William E. Smith also ordered Winner to pay restitution in the amount of $2,210,152 to the Medicare Program and a fine of $12,500. Winner was also ordered to serve three years of supervised release upon completion of his prison sentence.

At the time of his guilty plea, Winner admitted to the court that from 2005 through early 2009, he instructed Planned Eldercare employees, upon successfully reaching individuals as a result of unsolicited telemarketing calls, to inquire if they suffered from diabetes or arthritis. Once call recipients identified themselves as suffering from either ailment, as an inducement for recipients to provide their Medicare and physician information, employees were instructed to inform recipients that Planned Eldercare could provide them with products to help with their ailments “at no cost to you.” Once employees obtained Medicare beneficiaries’ agreement to receive certain products, Winner instructed employees to order as many products as possible whether or not the beneficiaries requested them or had a medical need for the equipment. Winner admitted that Medicare was billed for thousands of products that beneficiaries did not order.

Winner also admitted to the court that he instructed his employees to falsely inform male diabetic beneficiaries that an “erectile pump” was good for prostate problems, and was designed to help blood circulation exclusively in the urinary tract and prostate region. Winner admitted that as part of the scheme, he ordered penis enlargers from an x-rated website for $26.00 each, repackaged them with an information sheet stating that regular use of the enclosed “erectile pump” helps with bladder control, urinary flow and prostate comfort, and then shipped them to recipients. Winner received in reimbursement from Medicare an average of $284 per item.

Winner also admitted that he waived copayments for all Medicare patients, a practice which is prohibited by Medicare. By waiving copayments they otherwise would be responsible for, Winner induced beneficiaries to accept products they had not ordered and not report the alleged fraudulent billing to Medicare.

The case was prosecuted by Assistant U.S Attorney Dulce Donovan.

The matter was investigated by Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Railroad Retirement Board, Office of Inspector General; and the Food and Drug Administration, Office of Criminal Investigations.